Blog Posts: August 2014

Alabama’s Farm Analysis Program represents the best of what our nation’s “extension” program can be — utilizing the technical expertise of land-grant universities to improve farmer livelihoods. Extension, which this summer celebrates its centennial and is the subject of a series of blogs from Food & Water Watch, uses programs like this to connect farmers with university experts, in this case trained economists who conduct careful financial analyses of farm income.

This is especially the case for data about poultry production, where little meaningful, independent, financial data related to on-farm income is available. As Auburn University Professor Robert Taylor has noted, Alabama’s Farm Analysis Program “maintains the only set of consistent records on the actual economics of contract poultry production.”

Using this data, Taylor in 2002 highlighted the gross inequalities that exist in the poultry industry, concluding: “Farm business records show that contract producers who once had acceptable income from their poultry operations now put a few hundred thousand dollars of equity, and borrow several hundred thousand more to hire themselves at minimum wage with no benefits and no real rate of return on their equity. Yet integrators [large chicken processing companies] continue to earn 10-25% rates of return on equity.”

Ten years on, the problem is much worse. Most money generated from poultry production—including that from the 100 million chickens produced each year in Alabama—ends up in the coffers of one of a handful of corporate chicken companies while farmers exist on razor-thin margins, one or two bad flocks away from losing the farm.

Business journalist Chris Leonard’s new book “The Meat Racket” brilliantly describes the abuse and economic exploitation that poultry growers suffer under the thumb of companies like Tyson. Even the U.S. Department of Agriculture and the Department of Justice’s antitrust enforcement office offered a cursory acknowledgement of anti-competitive practices in the poultry industry with a public workshop at Alabama A&M in 2010, which has spurred talk of possible action from Congress and the USDA.

With the public spotlight finally shining on the rampant abuses in the poultry industry, it’s an awfully odd time for Alabama to jettison the Farm Analysis Program, as it did last May. An extension officer there told me that the state decided to shift resources to broader educational efforts. Farmers can still take classes on how to use QuickBooks and learn the basics of agricultural accounting, he told me, but extension now has greater time and flexibility to perform a range of functions that serve the public interest. But consider the public value that’s been lost with the demise of the “only set of consistent records on the actual economics of contract poultry production.”

The kind of economic concentration that exists in the chicken industry also exists elsewhere in the food system, with a handful of companies selling most of the seeds and agrochemicals, slaughtering most of the pigs and cattle, processing most food products, and selling food to consumers at grocery stores. This system greatly enriches the handful of companies at the top, but hurts farmers, workers, communities and consumers.

So, where is extension on this issue? Largely absent. This, again, raises questions about how relevant this institution is today, and to what extent extension is fulfilling the mission Congress laid out for it in 1914. All too often, extension avoids the most pressing economic and social issues facing farmers.

Stay tuned for Food & Water Watch’s continuing analysis of the hundred-year anniversary of cooperative extension.

Admitting a “significant shift” in its press release, Defra “hailed a change that puts business in charge of driving reform.” The goal is “lightening needless burdens without weakening essential controls.” This made me squirt tea out my nose.

To share a few recent examples of the way “needless burdens” are holding back food business:

There are other signs of strain in our food supply, too. At the end of July an antibiotic banned since 1995 as an increased cancer risk turned up in animal feed supplied by a Dutch company to farms in several other EU countries. Since in all likelihood this feed has already been used, it may be necessary to cull as many as 12,700 cattle and 50,000 pigs to clear the drug from the food system. Amid all of this, UK meat inspectors have gone on strike because the FSA refused to give them a 1 percent cost of living pay rise. If these are the problems we know about, I for one am worried about what we don’t yet know, and who’s looking out for us if the inspectors are this angry.

As citizens we’ve had to get used to having serious questions to our government answered by emails that sign off “Regards, Customer Contact Unit, Defra”, but inviting industry to regulate itself in such circumstances is surely taking this business-friendly thing a bit too far.

Cornell University announced last week that it is embarking on a multi-million dollar campaign to “depolarize the charged debate” around GMOs. Can you guess who’s behind this effort? The biotech industry and its supporters.

The website for this project, the Cornell Alliance for Science, is pretty sparse, but it does note its pro-GMO partners, including the International Service for the Acquisition of Agri-biotech Applications (ISAAA), which is funded by Monsanto, CropLife and Bayer.

This use of surrogates is par for the course with the biotech industry. Sometimes called the soft lobby, corporations routinely engage neutral-appearing scientists and impartial-sounding front groups to help advance their political and economic agendas. Food & Water Watch detailed the enormous amount of industry research coming out of our public land-grant universities in our 2012 report, Public Research, Private Gain.

Cornell’s newest foray into the GMO debate, the “Alliance for Science,” will add to the confusion and distortion in the public discourse around GMOs. Rather than trying to promote a civil, honest, impartial dialogue about GMOs—as you would expect from a university like Cornell—the school has chosen to partner with some of the biotechnology industry’s most prominent supporters and defenders. Read the full article…

Is there a salary worth risking your health or even your life? Big Oil and Gas might think so, but the ex-industry workers with whom we spoke aren’t so convinced.

Today, Food & Water Watch released Toxic Workplace: Fracking Hazards on the Job, a research brief that exposes the dangers of working in the fracking industry. Subject to long hours on the job, sloppy safety regulations and reporting, lack of injury compensation and close contact with hazardous chemicals, former industry laborers agree that the fracking workplace is a toxic one. As we reflect on the social and economic successes of the labor movement over this holiday weekend, it becomes more evident that the fracking industry may have missed the memo.

The practice of hydraulic fracturing involves drilling down to a targeted rock formation and injecting large volumes of water, sand and toxic chemicals at extreme pressure to create fractures in the rock and release tightly held oil and gas. The chemicals used in the fracking process can cause cancer and damage the nervous system, immune and cardiovascular systems and upset the endocrine system.

At the site, workers can be exposed to volatile organic compounds, including benzene and toluene, as well as fugitive methane, which are often released during fracking and can mix with nitrogen oxide emissions from diesel-fueled vehicles and stationary equipment to form ground-level ozone. Workers can also be exposed to silica sand, which is often used in the fracking process, and is a known human carcinogen. Long term exposure to silica, a component that makes up as much as 99 percent of frac sand, increases the likelihood of developing silicosis, which damages lung tissue and inhibits lungs function. Breathing it can make a person more susceptible to tuberculosis and is also associated with autoimmune disorders and kidney disease.

Randy Moyer, who used to work for the fracking industry as a subcontractor and dealt with shale gas wastewater, told us how he experienced first-hand the horrible effects of dealing with fracking chemicals and radioactive wastewater. He claims that the consequences of spending countless hours on the site included painful rashes, itching, sores and swelling of organs. “When I first got the rash, it was so bad; it’s like being on fire, and nobody can put you out,” Randy said.

To make matters worse, those on the frontlines risking their health and safety each day for the fracking industry are rarely compensated for any health problems they experience. Randy explained that he is going on 35 months without compensation or medical coverage for over twenty emergency room visits and a myriad of doctors’ appointments. “They basically put me out on my own,” he said.

In addition to exposure to harsh chemicals and radiation, workers also have to combat the every day dangers of working on the site, such as precarious equipment and long hours of strenuous work. As a result, the oil and gas industry’s fatality rate is 6.5 times the national average. From 2003-2012, 26 in 100,000 people died while working in the oil and gas industry; the national average for all U.S. jobs is four fatalities in 100,000.

“As they exploit their own workers, the oil and gas industry is always quick to tout the so-called ‘economic benefits’ of fracking,” said Food & Water Watch Executive Director Wenonah Hauter. “But what good are jobs that injure workers and rob them of their health? We cannot stand by and allow the industry to profit from the exploitation of its labor force. The experiences of these workers illustrates that fracking is a toxic process through and through.”

With such high risks associated with working in the industry, those contracted to work in this dangerous field should be given extensive safety training and be fully educated in the types of conditions and chemicals they work with. However, Randy explained that workers were prohibited from raising these concerns about unknown chemicals and exposure on the job. “You aren’t allowed to even talk about it; if you talk about it, you’re gone.” He went on to explain the mentality of the industry, “If you don’t know, your company doesn’t know, your workers will never know, because you’re not allowed to discuss any of this on pads or they will fire you.”

To make matters worse, many oil and gas companies offer incentives to encourage laborers not to report safety accidents or file workers’ compensation claims in order to make themselves look good, but this distorts safety statistics.

Frequent accidents are swept under the rug by well site supervisors and company executives to protect profits. Thirty-year veteran of the fracking industry and former master driller, Lee McCaslin explained that previously injured or killed workers had written the job safety training in blood. “I walked around with a broken toe, a broken rib, you know, to get to the safety pad at the end of the hall to get that extra $57 we got for our safety award. I don’t know if it was worth the suffering,” Lee said. “Even our bosses knew that we were injured, but as long as we had no reporting of an accident, the whole crew was viable for those bonuses,” he said.

Allowing overly exhausted workers to operate and maintain heavy drilling machinery in such dangerous conditions without any consideration for safety is common practice in the fracking industry. Many accidents occurring in the fracking industry stem from the irregular and long work hours. Lee McCaslin recalled working fourteen-hour days. “The hours are just enough to put you into a state of being where you walk around like a zombie half of the time.”

This is clearly an industry that places no value in the safety, or even lives, of their workers. “You’re expendable to the industry. There is always someone else to come fill that seat,” Randy quipped.

When asked what he would say to someone trying to work in the fracking industry, Randy stated, “This will ruin your health. It takes a very small amount of this to do it. If you value your health, you won’t even get close to it.” As Lee reflects on his time as an industry laborer, he claims “I’m grateful for my life today.” No one should fear for his or her life at work, but unfortunately, this is the reality that oil and gas industry workers face on a daily basis.

Update, August 29: Preliminary field studies from the Centers for Disease Control and Prevention (CDC) find that workers in the oil and gas industry can be exposed to higher than recommended levels of benzene.

This summer marks the 100-year anniversary of cooperative extension, maybe the oldest federal agricultural program you’ve never heard of. Awkwardly named, “extension” was established by Congress in 1914 to help disseminate the groundbreaking agricultural research produced by our public, land-grant universities.

In its earliest years, extension showed its potential to shape American agriculture, partnering with farmers, consumers and universities to develop and share best products and practices. That same potential exists today, but eroding federal support and growing corporate influence threaten to undermine it. Through a series of blogs in the weeks ahead, we’ll examine whether extension today is fulfilling its original mission set by Congress.

Fast-forward 100 years, and the “science” really is bearing down on our broken food system, as technologies like GMOs and the factory farm model dominate American agriculture and the public health and environmental consequences of this system become ever more apparent.

Yet, you can still find good examples of extension working to improve our food system. Organic food production, one of the fastest growing sectors in agriculture, is getting some love from extension through a program called eOrganic, designed to share best practices with organic producers via the internet. In addition, many land-grant schools, including Cornell, Iowa State and the University of Georgia, conduct outreach through their extension offices on organic agriculture.

Many states also now offer much-needed assistance to small and mid-sized animal producers through a program called the Niche Meat Processors Assistance Network.Because a handful of companies now slaughter and sell most of the cattle, pigs and poultry in the United States, small producers struggle to find the USDA-inspected slaughter facilities necessary for processing animals for commercial markets. By promoting innovative programs like mobile slaughter units that bring the abattoir to the farm and training programs on food safety rules, this extension program helps smaller producers get a fighting chance to enter a marketplace controlled by a handful of meatpackers.

While these efforts are valuable and indicative of the power and potential of extension to transform agriculture, they are also, unfortunately, too rare, and they don’t get at the most pressing problems in agriculture, like growing corporate power. That’s because the public mission that Congress intended for our land-grant universities and extension offices has been weakened or reinterpreted over the decades, and cooperative extension today appears to do as much, or more, to help corporate agribusiness as it does to help farmers.

Mending our broken food system also requires fixing the outreach efforts of extension and the research agenda of our land-grant universities. Stay tuned for more about that in the weeks ahead, but, in the meantime, take a look at Food & Water Watch’s report, Public Research, Private Gain.

The deal takes advantage of a corporate tax loophole that allows U.S. companies to merge with foreign firms and relocate their headquarters to lower-tax countries. This “tax inversion” or “tax expatriation” merger strategy has become a common tax shelter. Other food companies have exploited opportunities for tax inversion mergers this year, including the Chiquita Brands (when it purchased Fyffes, the Irish banana distributor) and Mondelez International, formerly the cookie, cracker and candy arm of Kraft Foods, when it merged with the Dutch firm D.E. Master Blends. Companies have been merged and spun-off so frequently, you really do need a scorecard to know who is who these days.

Despite renouncing American corporate citizenship, Burger King is unlikely to reap substantial tax benefits. Although the big business lobby harps on the high U.S. corporate tax rate, the reality is that few companies actually pay the statutory rate because of tax loopholes and subsidies tucked into the tax code. Many of America’s largest and most profitable companies pay no taxes at all, according to a 2014 study by Citizens for Tax Justice.

Some $900 billion in merger deals have been announced this year, and most observers believe that more corporate takeovers are in the works. The U.S. food and agriculture sector was already too consolidated, with a few firms controlling every link in the food chain from seed to supermarket. Unless the antitrust cops start to vigorously enforce the law, the current merger wave will only make a bad situation worse for farmers and consumers.

Consumers look to discount stores for relief during economically challenging times. But a rash of recent mergers may undermine consumer choice, particularly where grocery shopping is concerned. On Monday, Dollar General, the largest discount store chain in the United States, outbid the third largest, Dollar Tree, to purchase the second largest discounter, Family Dollar. Just three days later, Family Dollar rejected Dollar General’s bid, indicating that it would stick to the earlier deal with Dollar Tree.

Once you sort through the drama of these similarly named companies vying to acquire a key competitor (that also has a similar name), there are other aspects of this bidding war that offer a fascinating glimpse into the economics of our food system. This evolving deal continues a merger-mania bidding war trend that started in May when Tyson Foods outbid meatpacking giant JBS to merge with Hillshire Brands, and follows the acquisition of Safeway by the Albertson’s grocery chain, one of the biggest grocery store mergers in 25 years. Both the Tyson-Hillshire and Albertsons-Safeway deals are pending review by antitrust regulators.

Dollar General bid $9.7 billion to snatch Family Dollar away from Dollar Tree, which bid $8.5 billion in July. The General-Family proposed merger would result in nearly 20,000 stores in 46 states, with $28 billion in sales. This would be the largest retail merger in a year that has already seen about $31 billion in retail mergers.

The three major “Dollar” discount stores (Tree, General and Family) have prospered during the economic downturn and have rapidly captured sales from Walmart and Target. For consumers with modest, moderate or lower-incomes, these have been go-to retailers during the recession. Dollar General wants Family Dollar to expand its footprint in more urban areas, although there is already significant overlap between the stores. For example, in the Baltimore area, there are nearly 30 Family Dollar stores and nearly 20 Dollar General stores, compared to about 15 Safeway supermarkets.

Supermarkets like Albertson’s and Safeway claim they need to merge with their competitors to cope with competition from big box stores like Walmart. Likewise, Walmart’s biggest challenge is the rise of the dollar store chains. Walmart’s initial growth was fueled by its big-box supercenters — enormous warehouse retail outlets typically located on the outskirts of towns or cities. But in recent years, its supercenter revenues have flattened, and the only growth has come from its smaller, more conveniently located stores. The companies involved in the dollar store deal claim that the proposed General-Family merger would strengthen the company to fight Walmart for the “small-box” market. But while all these retailers are looking for an advantage in the grocery business, when communities end up with fewer players running their local grocery stores, consumers rarely win.

The Federal Trade Commission has antitrust oversight jurisdiction over this merger. Although Dollar General contends there are few antitrust concerns, it has already offered to shed 700 stores (only about 3.5 percent of the merged chain’s total) to get the deal approved, and one of the reasons offered by Family Dollar for rejecting the offer were concerns about “significant antitrust issues.”

The bidding war may not be over, but one thing is clear. The merger mania that has swept through the rest of the food system has arrived at the grocery store, and food shoppers need federal regulators to preserve some amount of competition in local grocery markets.

UPDATE (9/2/2014):

Today, Dollar General announced a new, bigger cash offer to acquire Family Dollar. The new offer is the carrot to encourage Family Dollar to take the deal, but Dollar General is prepared to take the offer directly to shareholders in a hostile takeover if the board of Family Dollar does not accept the new offer. Family Dollar rejected the earlier offer because of antitrust concerns, but Dollar General volunteered to double the number of stores it would divest (as many as 1,500) and hired the recent head of President Obama’s Bureau of Competition at the Federal Trade Commission to analyze the proposed merger. As we advised two weeks ago: Stay tuned.

The meat industry knows no shame, and you can put the National Pork Producers Council (NPPC) at the top of the list.

Back in 1985 Congress enacted a law that placed a fee on every hog farmer and exporter in the country. The money taken from farmers went into the National Pork Board (NPB), which in turn funneled a considerable amount of the funds to the NPPC. In 2000, NPPC received $36.5 million of the $48.1 million NPB spending budget raised from these required payments. This NPPC pigs-at-the-trough funding scheme became known as the “check-off” program.

In 1999 a group called the Campaign for Family Farms (CFF) submitted a petition to USDA signed by over 19,000 hog farmers in the country who wanted to get rid of the mandatory NPB payments and replace it with a voluntary check-off program. NPPC promptly filed a Freedom of Information Act (FOIA) request with USDA asking for the names and addresses of producers who signed the petition so they could compile a list of people who threatened their check-off cash cow.

When CFF went to federal court in Minnesota to stop USDA from releasing the petition list, NPPC intervened in the case and tried to force disclosure of the information. The court, though, denied NPPC access to the list of anti-check-off farmers. Undeterred, NPPC took their case to the 8th Circuit Court of Appeals, where the higher court also sent NPPC packing, stating “[t]o make public such an unequivocal statement of their position on the referendum effectively would vitiate petitioners’ privacy interest in a secret ballot.”

Fast forward to today, and NPPC has a very different view about disclosure of names and addresses of the country’s pork producers.

In 2013, the Environmental Protection Agency (EPA) succumbed to political pressure and withdrew a proposed rule to collect baseline information from highly polluting industrial meat operations. EPA’s knowledge of this industry, which contributes significantly to nutrient impairment of waterways across the country, is so abysmal that the agency can’t even tell us how many facilities exist or where they’re located. From the Gulf of Mexico to the Chesapeake Bay, to Toledo, Ohio where the city’s citizens just recently had their drinking water taken from them because of algae blooms in Lake Erie, communities across the nation suffer from the irresponsible dumping of excess animal manure from these facilities, while EPA wrings its hands.

After EPA’s improper abandonment, a group of environmental organizations filed a FOIA asking for all the documents that EPA relied on to withdraw the rule. Included in the documents were a number of spreadsheets culled from publicly available state databases and websites that listed the names and addresses of many of these factory farms.

Predictably, NPPC threw a fit when this public information was released. NPPC president R.C. Hunt said he felt “betrayed” by the disclosure. Press statements by NPPC and other industry groups verged on hysteria, invoking empty claims of “eco terrorism” and “dangerous militants.” Their uncontrolled fear mongering stopped just short of asking for the Administration to place the nation on red alert.

Last summer, NPPC walked back into the same Minnesota court that sent them back to D.C. with their tails between their legs in 2000 and asked the judge to issue an order to prevent EPA from disclosing the names and addresses of these industrial facilities, the very same type of information they went into court in 2000 seeking to obtain for themselves.

In their recent filing with the Minnesota court, NPPC suggests that the 8th Circuit’s 2000 ruling supports their newly invented position that the disclosure of names and address of industrial farms are disallowed because of “privacy” concerns. But that’s not what the court said. It’s not names and addresses of farms that the court held to be subject to a “privacy interest,” but the check-off program opinion of hog farmers reflected in the “secret ballot.”

Hypocrisy is nothing new to the meat industry. Industrial agriculture, which relies heavily on federal and state taxpayer subsidies while denouncing any governmental interference in their non-control of their vast pollution problem, literally lives off hypocrisy. Their latest hypocritical position on farm data disclosure is not based on any noble notion of sanctity of farmers; they proved they don’t give a damn about that in 2000. Back in 2000, disclosure was good because they were fighting hog farmers who were threatening their funding. Today, it’s bad because they’re fighting environmentalists who are concerned about the adverse impact from modern industrial agriculture on our waterways, communities and public health.

That contradiction tells you where NPPC’s real interests lie. It’s not about farming, or farmers, or about being responsible and accountable; it’s all about using whatever tactic is necessary, including attacking its own base, ignoring the facts and instilling fear to maintain NPPC’s funding and political power.

When you imagine your family vacation, do drilling rigs or the roar of wastewater tankers rumbling down a forest service road immediately come to mind? Unfortunately, with the Obama administration’s proposed rules for drilling and fracking on federal lands, our treasured national lands may begin to resemble this grim image. Read the full article…

I recently spent two fascinating days at the Food and Drug Administration (FDA) for a public meeting on the National Antimicrobial Resistance Monitoring System (NARMS). Between the technical jargon and numerous acronyms, what emerges is a story about government scientists working on the front lines to keep antibiotics working for you and me.

An FDA researcher described how “whole genome sequencing,” reading the entire DNA strand of foodborne pathogens, is allowing them to create evolutionary trees that demonstrate how bacteria and patterns of antibiotic resistance change over time. In one recent outbreak, whole genome sequences of bacteria from the people affected, the food they all ate, and the nearby plant that produced the food allowed scientists to identify the source of the outbreak, which allowed for quicker closure of the plant in order to solve the problem. Comment after comment pointed to whole genome sequencing as the “next big thing” for addressing illness outbreaks.

Food & Water Watch champions healthy food and clean water for all. We stand up to corporations that put profits before people, and advocate for a democracy that improves people's lives and protects our environment.